Xiaomi eyes auto debut in 2024 but how will it drive its core business?
Xiaomi is one among several consumer electronics' brands that is all set to enter the automotive space and clearly sees space for the taking in the electric vehicle segment. The company has already confirmed its first-ever electric vehicle will make its debut early 2024 but a smaller-than-expected 8.2% rise in third-quarter revenue could potentially cast doubts on its ‘expansionist’ plans.
Xiaomi has taken a clear aim to enter the mass-market EV space come 2024 and has big ambitions to take on established players in the automotive industry. But being a giant in the consumer electronics space, many say, may not assure of a similar stature in the automotive space, especially as its core business of making and selling smartphones may be going through a rough patch. Smartphone shipment for the Chinese company has fell 5.8% on the year in the third quarter to 43.9 million units. The blame has been put squarely on the global shortage of semiconductor chip, the same problem that is also plaguing almost every auto brand across the world.
But while the problem is real and omnipresent for all big players in electronics and automobile space, so is the competition.
In the world of personal electric mobility, Tesla has a major lead with the likes of Volkswagen, Ford, Hyundai and Toyota some of the other players of note. But the entry of new players like Xiaomi, Huawei and others could further intensify the rivalry, especially int he affordable EV market. Experts believe that while this is great news for the consumer who will have even more options to choose from, it may also create supply-side issues if the semiconductor problem persists.
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Demand for semiconductor chip - used in products like laptops, phones, smart TVs and even modern-day vehicles - has been remarkably high and there is no solution or resolution that is in sight at present. A few industry leaders have even gone on record to say that they predict the problem to persist till at least 2023.
Will, then, a shipment fall in smartphone possibly make Xiaomi have a re-think over its EV plans? Time will tell.